19. Members

(1) In addition to the Persons named as members of a Limited Liability Partnership in the partnership agreement, a Person may become a member of the partnership with the agreement of the existing members.

(2) A Person may cease to be a member of a Limited Liability Partnership (as well as by death or dissolution) with the agreement of the other members or, in the absence of agreement with the other members, by giving reasonable notice to the other members.

(3) No majority of members can expel any member unless a power to do so has been given by express agreement between the members.

(4) A member of a Limited Liability Partnership must not be regarded for any purpose as employed by the partnership.

(5) A Limited Liability Partnership must not conduct any business, purpose or activity if it has fewer than two members and has had less than 2 members for at least 14 days.

(6) Subsection (7) applies to a Person if:

• (a) the Person is a member of a Limited Liability Partnership that conducts any business, purpose or activity during any period in contravention of subsection (5); and
• (b) during the whole or any part of the period mentioned in paragraph (a), the Person knows that the partnership is conducting the business, purpose or activity with fewer than 2 members.

(7) The Person is liable (jointly and severally with the Limited Liability Partnership) for the payment of the partnership’s debts contracted during the period to which subsection (6)(b) applies.

20. Relationship of members

(1) Except so far as otherwise provided under these Regulations, any other AIFC Regulations or any AIFC Rules, the mutual rights and duties of the members of a Limited Liability Partnership, and the mutual rights and duties of the partnership and its members, are governed by the partnership agreement.

(2) A partnership agreement made before the incorporation of a Limited Liability Partnership between the Persons who apply for the partnership’s incorporation may impose obligations on the partnership to take effect at any time after its incorporation.

21. Functions of members

A member of a Limited Liability Partnership must, in Exercising the Functions of a member:

• (a) act honestly and in good faith with a view to the best interests of the members and the partnership; and
• (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

22. Members as agents

(1) Each member of a Limited Liability Partnership is an agent of the partnership for the purpose of the partnership’s business, purpose or activity.

(2) An act of a member of a Limited Liability Partnership in the ordinary course of the partnership’s business, purpose or activity binds the partnership, unless:

• (a) the member had no authority to act for the partnership in the particular matter and the Person with whom the member was dealing had notice that the member had no authority; or
• (b) there are circumstances of fraud or misrepresentation.

(3) If the members of a Limited Liability Partnership agree that a restriction should apply to the power of any one or more of them to bind the partnership, nothing done in contravention of the restriction is binding on the partnership in relation to Persons having notice of the restriction.

(4) If a Person (the former member) has ceased to be a member of a Limited Liability Partnership, the former member is to be regarded, in relation to any Person dealing with the partnership, as still being a member of the partnership unless:

• (a) the Person has notice that the former member has ceased to be a member of the partnership; or
• (b) notice that the former member has ceased to be a member of the Partnership has been given to the Registrar of Companies.

(5) If a member of a Limited Liability Partnership is liable to any Person (other than another member of the partnership) as a result of a wrongful act or omission of the member in the course of the partnership’s business or with its authority, the partnership is jointly and severally liable to the same extent as the member.

23. Assumptions in relation to members

(1) A Person dealing with a Limited Liability Partnership is entitled to assume that anyone who appears, from information that is available on a public register of current registrations kept by the Registrar of Companies under these Regulations, to be a member of the partnership:

• (a) is a member of the partnership; and
• (b) has authority to Exercise the Functions customarily Exercised by a member of a Limited Liability Partnership.

(2) A Limited Liability Partnership is not entitled to assert in proceedings in relation to dealings of the partnership that any assumption under subsection (1) is incorrect.

(3) However, a Person is not entitled to make an assumption mentioned in subsection (1) if at the time of the dealings the Person knew or suspected that the assumption was incorrect.

24. Former members

(1) This section applies if a member of a Limited Liability Partnership has:

• (a) ceased to be a member; or
• (b) died; or
• (c) become bankrupt or has been wound up; or
• (d) assigned the whole or any part of the member’s share in the partnership absolutely or by way of charge or security.

(2) Any of the following must not interfere with the management or administration of any business or affairs of the Limited Liability Partnership:

• (a) the former member;
• (b) the deceased member’s personal representative;
• (c) the member’s administrator, trustee or liquidator (however described);
• (d) the member’s assignee.

(3) However, this section does not affect any right to receive an amount from the Limited Liability Partnership.

25. Designated Members

(1) If the partnership agreement of a Limited Liability Partnership specifies who are to be Designated Members, they become the Designated Members on incorporation.

(2) Any other member may, at any time, become a Designated Member with the agreement of the other members.

(3) A member who is a Designated Member may cease to be a Designated Member with the agreement of the other members.

(4) However, there must, at all times, be at least 1 Designated Member and, if at any time no member is appointed as a Designated Member, every member is taken to be a Designated Member.

(5) If the partnership agreement states that every member of the Limited Liability Partnership is a Designated Member, every member is a Designated Member.

(6) A Limited Liability Partnership may at any time give the Registrar of Companies:

• (a) notice that specified members are Designated Members; or
• (b) notice that every member of the partnership is a Designated Member.

(7) Matters stated in a notice given by a Limited Liability Partnership under subsection (6) have effect as if they were stated in the partnership agreement.

(8) A notice given by a Limited Liability Partnership under subsection (6) must be:

• (a) in a form approved by the Registrar of Companies; and
• (b) signed by a Designated Member of the partnership or authenticated in a way approved by the Registrar.

(9) A Person ceases to be a Designated Member if the Person ceases to be a member.

(10) The Designated Members of a Limited Liability Partnership have the Functions given under these Regulations and the Rules.

26. Notification of membership changes

(1) This section applies to a Limited Liability Partnership if there is a change in:

• (a) the members or Designated Members of the partnership; or
• (b) the name or address of a member.

(2) The Limited Liability Partnership must give the Registrar of Companies notice of the change, in accordance with subsection (5), within the required number of days after the day the change happens and must comply with all other requirements applying to the partnership under the Rules in relation to the change.

(3) For subsection (2), the required number of days is:

• (a) for a change mentioned in subsection (1)(a)—14 days; or
• (b) for a change mentioned in subsection (1)(b)—28 days.

(4) If all the members the Limited Liability Partnership are Designated Members, subsection (2) does not require notice that a Person has become or ceased to be a Designated Member as well as a member.

(5) The notice under subsection (2):

• (a) must be in a form approved by the Registrar of Companies; and
• (b) must be signed by a Designated Member of the Limited Liability Partnership or authenticated in a way approved by the Registrar; and
• (c) if it relates to a Person becoming a member or Designated Member—must contain a statement that the Person consents to becoming a member or Designated Member and must be signed by the Person or authenticated in a way approved by the Registrar.

(6) Each Designated Member of the Limited Liability Partnership must take reasonable steps to ensure that subsection (2) is complied with.

(6-1) Changes in the Registered Details notice must be accompanied by the prescribed fee set out in the Rules from time to time.

(7) Contravention of subsection (2) or (6) is punishable by a fine.